Standard Chartered to set up committee to curb law breaking as US regulators turn up the heat following breach of sanctions

Standard Chartered has established a board committee to ensure it does not commit more financial crimes, as US regulators extend their surveillance of the bank.

The UK giant said the Board Financial Crime Risk Committee will from next month assume responsibility for ensuring the bank does not bust sanctions, breach anti-money laundering regulations or break tax laws.

It will be chaired by Simon Lowth, an independent director at the bank since May 2010, who is oil and gas firm BG Group’s finance chief.

Under scrutiny: Standard Chartered has established a board committee to ensure it does not commit more financial crimes, as US regulators extend their surveillance of the bank

The action comes a day after the US Department of Justice and the New York County District Attorney’s Office said they were extending their monitoring of the firm by three years until 2017.

It means the bank will stay under intense scrutiny and could face prosecution and bigger fines if it puts a step wrong.

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The original two-year deferred prosecution agreement, due to expire today, was struck after the emerging markets specialist was fined £420million in 2012 for breaching US sanctions against brutal regimes such as Iran.

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US authorities are now investigating whether Standard Chartered breached sanctions after 2007, when the wrongdoing was previously thought to have stopped.

The firm warned investors in August that an extension of the two-year deferred prosecution agreement was likely. That month it was fined £190million by US authorities for sloppy anti-money laundering controls.

The extension of surveillance is another setback for Standard Chartered, which has issued three profit warnings this year.

Yesterday, Investec analyst Ian Gordon courted controversy by comparing Standard Chartered’s problems with US authorities with Eric Garner, an unarmed black man who was choked to death in the US earlier this year.